315 P.3d 279
Mont.2013Background
- Steve Sangwin (state employee) and daughter McKinley (Plan beneficiary) sought preauthorization from BCBS/State for artificial disc replacement; BCBS denied as "investigational/experimental for research" because not FDA‑approved for under‑18s.
- State appeals committee upheld denial; Sangwins proceeded with surgery, incurred >$55,000 in bills, and sued the State and BCBS alleging wrongful denials under the Plan's experimental exclusion.
- Sangwins moved for class certification seeking a class of Plan participants denied benefits under the Plan’s "experimental/investigational" exclusion (2003–2011); District Court certified the class and four issues including breach of contract by the State.
- BCBS settled and is no longer a party; the State appealed the District Court’s class certification order.
- Montana Supreme Court affirmed certification under Rule 23(a) (numerosity, commonality, typicality, adequacy) but reversed certification of the specific classwide question—"whether the State breached its contract"—because individual factual inquiries (to determine who belongs in class and whether each denial was "for research") would predominate under Rule 23(b)(3).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether class certification met Rule 23(a) prerequisites | Sangwin: numerosity, commonality, typicality, and adequacy satisfied because many denials used same exclusion and shared legal theory | State: factual variation among denials (different procedures, contexts, some proper denials) defeats typicality/commonality | Court: affirmed Rule 23(a) findings — numerosity, commonality, typicality, adequacy not abused by trial court |
| Whether certification met Rule 23(b)(3) predominance and superiority | Sangwin: common liability issue (State misapplied exclusion) predominates; individual damages alone do not defeat class treatment | State: each claim requires individual factual review (to decide if denial was "for research"), so individual issues predominate | Court: reversed certification of the classwide question ‘‘whether the State breached its contract’’ — predominance not satisfied because individual threshold inquiries are required |
| Proper scope/formulation of classwide question | Sangwin: only claimants whose services were not "for research" would remain, allowing class adjudication on breach | State: threshold factual determinations (consent forms, clinical context) must be made individually prior to class inclusion/liability | Court: agreed with State — plaintiffs’ certified question cannot be resolved classwide; remanded to allow court to identify a narrower issue suitable for class treatment |
| Role of merits in certification (probing beyond pleadings) | Sangwin: court may probe necessary facts to determine Rule 23 requirements | State: district court failed rigorous analysis; must consider overlap with merits per Wal‑Mart/Comcast | Court: district court permissibly probed beyond pleadings; rigorous analysis required; applied precedent but reversed on predominance ground |
Key Cases Cited
- Wal‑Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (tightened Rule 23 commonality; common contention must be capable of classwide resolution)
- Comcast Corp. v. Behrend, 569 U.S. 27 (2013) (rigorous analysis of Rule 23 and limits on classwide damages models and predominance)
- Falcon v. General Tel. Co. of Southwest, 457 U.S. 147 (1982) (trial court may probe beyond pleadings to decide certification; actual conformance with Rule 23(a) required)
- Chipman v. N.W. Healthcare Corp., 288 P.3d 193 (Mont. 2012) (abuse‑of‑discretion standard for Montana class certification decisions)
- Diaz v. Blue Cross & Blue Shield, 267 P.3d 756 (Mont. 2011) (typicality and proof required to show common course of conduct by insurer)